Once you've placed a contractor on an assignment, the last things you want are issues or distractions. Unfortunately, one issue that can upset the status quo, especially at this time of year, is holiday pay.
A lot has been written recently about contractors losing out on holiday pay due to the suspect practices of some umbrella companies. And when contractors feel like they're losing out, that's when the problems begin.
So, how can you be sure that your contractors are getting the holiday pay they are entitled to?
Understanding holiday pay.
First and foremost, if your contractor is engaged as an employee via an umbrella company, they should qualify for holiday pay.
An element (e.g., 12.07% to cover 20 days annual leave plus eight days statutory leave) of your contractor's rate is set aside for each hour or day they work. As this element builds, it is commonly referred to as accrued holiday pay and is paid to your contractor when they take a holiday.
The problem with accrued holiday pay.
The issue with accrued holiday pay is that it generally accrues over a fixed 12-month period, commonly called the holiday year.
Depending on the umbrella company's policies, if the contractor doesn't claim their accrued holiday pay within the holiday year or before they finish their assignment, they're unlikely to be able to carry it over and may lose it altogether.
What the contractor loses, the umbrella company keeps. It's a problem we're sure you'll want to avoid.
Champion Contractors ensures that your contractors always get their holiday pay.
At Champion Contractors, we offer your contractors the option of accruing holiday pay or having their holiday pay rolled up and paid to them every time they receive a payment from us.
When choosing accrued holiday pay, Champion will automatically pay out any unclaimed accrued holiday pay at the end of our stipulated holiday year or when your contractor completes their assignment.
Regardless of the option they choose, your contractors never lose out, leaving you with one less thing to worry about.
For further information on holiday pay, contact the Champion Contractors team on 0161 703 2549 or email info@championcontractors.co.uk.